CALGARY, ALBERTA--(Marketwired - May 25, 2015) - Pan Orient Energy Corp. ("Pan Orient") (TSX VENTURE:POE) reports its 2015 first quarter consolidated financial and operating results. Please note that all amounts are in Canadian dollars unless otherwise stated and BOPD refers to barrels of oil per day.
The Corporation is today filing its unaudited consolidated financial statements as at and for the three months ended March 31, 2015 and related management's discussion and analysis with Canadian securities regulatory authorities. Copies of these documents may be obtained online at www.sedar.com or the Corporation's website, www.panorient.ca.
Commenting today on Pan Orient's first quarter 2015 results, President and CEO Jeff Chisholm stated: "These financial results and the announcement of the Government of Indonesia's approval of the East Jabung PSC farmout clearly demonstrate the progress achieved over the past year in the corporate initiative to reduce our future capital exposure and strengthen our balance sheet."
Highlights
2015 FIRST QUARTER OPERATING RESULTS
OUTLOOK
Pan Orient is a Calgary, Alberta based oil and gas exploration and production company with operations currently located onshore Thailand, Indonesia and in Western Canada.
This news release contains forward-looking information. Forward-looking information is generally identifiable by the terminology used, such as "expect", "believe", "estimate", "should", "anticipate" and "potential" or other similar wording. Forward-looking information in this news release includes, but is not limited to, references to: well drilling programs and drilling plans, estimates of reserves and potentially recoverable resources, and information on future production and project start-ups. By their very nature, the forward-looking statements contained in this news release require Pan Orient and its management to make assumptions that may not materialize or that may not be accurate. The forward-looking information contained in this news release is subject to known and unknown risks and uncertainties and other factors, which could cause actual results, expectations, achievements or performance to differ materially, including without limitation: imprecision of reserve estimates and estimates of recoverable quantities of oil, changes in project schedules, operating and reservoir performance, the effects of weather and climate change, the results of exploration and development drilling and related activities, demand for oil and gas, commercial negotiations, other technical and economic factors or revisions and other factors, many of which are beyond the control of Pan Orient. Although Pan Orient believes that the expectations reflected in its forward-looking statements are reasonable, it can give no assurances that the expectations of any forward-looking statements will prove to be correct.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Financial and Operating Summary (thousands of Canadian dollars except where indicated) |
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Three Months Ended March 31, |
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2015 | 2014 | % Change | ||||
FINANCIAL | ||||||
Financial Statement Results - Excluding 50% Interest in Thailand Joint Venture from February 2, 2015 onwards (Note 1) | ||||||
Net income (loss) attributed to common shareholders | 33,940 | (185) | ||||
Per share - basic and diluted | $ | 0.60 | $ | (0.00) | 100% | |
Cash flow from (used in) operating activities (Note 2) | (510) | 4,599 | -111% | |||
Per share - basic and diluted | $ | (0.01) | $ | 0.08 | -92% | |
Cash flow from (used in) investing activities (Note 2) | 44,003 | (10,816) | -507% | |||
Per share - basic and diluted | $ | 0.78 | $ | (0.19) | -411% | |
Working capital | 80,623 | 41,699 | 93% | |||
Working capital & non-current deposits | 84,955 | 44,040 | 93% | |||
Long-term debt | - | - | 0% | |||
Shares outstanding (thousands) | 56,617 | 56,760 | 0% | |||
Working Capital and Non-current Deposits | ||||||
Beginning of period | 40,854 | 47,889 | -15% | |||
Funds flow from consolidated operations (Note 4) | (117) | 4,367 | -103% | |||
Funds flow from sale of Thailand interest | 48,877 | - | 100% | |||
Working capital and non-current deposits derecognized on sale of Thailand interest and recorded in Investment in Joint Venture | (3,151) | - | 100% | |||
Consolidated capital expenditures (Note 6) | (1,864) | (11,010) | -83% | |||
Funds flow from investment in Thailand Joint Venture | (28) | - | 100% | |||
Disposal of petroleum and natural gas assets (Note 7) | - | 2,698 | -100% | |||
Foreign exchange impact on working capital | 586 | 96 | 509% | |||
Normal course issuer bid | (202) | - | 100% | |||
End of period | 84,955 | 44,040 | 93% | |||
Economic Results - Including 50% Interest in Thailand Joint Venture from February 2, 2015 onwards (Note 3) | ||||||
Total funds flow from operations (Note 4) | 360 | 4,367 | -92% | |||
Per share - basic and diluted | $ | 0.01 | $ | 0.08 | -92% | |
Funds flow from (used in) operations by region (Note 4) | ||||||
Canada (Note 5) | (17) | 100 | -117% | |||
Thailand - 100% to February 1, 2015 (Note 1) | 298 | 4,981 | -94% | |||
Indonesia | (398) | (714) | -44% | |||
Funds flow from consolidated operations | (117) | 4,367 | -103% | |||
Share of Thailand Joint Venture (Note 3) | 477 | - | 100% | |||
Total funds flow from operations | 360 | 4,367 | -92% | |||
Funds flow from sale of Thailand interest | ||||||
Sales proceeds | 53,456 | - | 100% | |||
Transaction costs | (1,428) | - | 100% | |||
Working capital and non-current deposits in Thailand interest sold | (3,151) | - | 100% | |||
Total funds flow from disposition of Thailand interest | 48,877 | - | 100% | |||
Petroleum and natural gas properties | ||||||
Capital expenditures (Note 6) | 4,389 | 11,010 | -60% | |||
Dispositions - excluding sale of Thailand interest (Note 7) | - | (2,698) | -100% | |||
Capital Expenditures (Note 6) | ||||||
Canada (Note 5) | 1,374 | 4,146 | -67% | |||
Thailand - 100% to February 1, 2015 (Note 1) | 60 | 2,554 | -98% | |||
Indonesia | 430 | 4,310 | -90% | |||
Consolidated capital expenditures | 1,864 | 11,010 | -83% | |||
Share of Thailand Joint Venture capital expenditures | 2,525 | - | 100% | |||
Total capital expenditures | 4,389 | 11,010 | -60% | |||
Investment in Thailand Joint Venture | ||||||
Beginning of period | - | - | 0% | |||
Investment retained on sale of Thailand interest | 38,587 | - | 100% | |||
Net loss from Joint Venture | (293) | - | 100% | |||
Other comprehensive income from Joint Venture | 436 | - | 100% | |||
Amounts (received from) advanced to Joint Venture | 28 | - | 100% | |||
End of period | 38,758 | - | 100% | |||
(thousands of Canadian dollars except where indicated) | Three Months Ended March 31, |
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2015 | 2014 | Change | ||||
Thailand Operations | ||||||
Economic Results - Including 50% Interest in Thailand Joint Venture from February 2, 2015 onwards (Note 3) | ||||||
Oil sales (bbls) | 28,174 | 64,117 | -56% | |||
Average daily oil sales (BOPD) by Concession L53 | 313 | 712 | -56% | |||
Average oil sales price, before transportation (CDN$/bbl) | $ | 60.23 | $ | 105.28 | -43% | |
Reference Price (volume weighted) and differential | ||||||
Crude oil (Brent $US/bbl) | $ | 52.50 | $ | 108.07 | -48% | |
Exchange Rate $US/$Cdn | 1.25 | 1.12 | 8% | |||
Crude oil (Brent $Cdn/bbl) | $ | 65.79 | $ | 120.93 | -44% | |
Sale price / Brent reference price | 92% | 87% | 2% | |||
Funds flow from operations (Note 4) | ||||||
Crude oil sales | 1,697 | 6,750 | -75% | |||
Government royalty | (81) | (329) | -75% | |||
Transportation expense | (46) | (104) | -56% | |||
Operating expense | (475) | (1,038) | -54% | |||
Field netback | 1,095 | 5,279 | -79% | |||
General and administrative expense (Note 4) | (314) | (299) | 5% | |||
Interest income | 2 | 2 | 0% | |||
Realized foreign exchange loss | (8) | - | 100% | |||
Current income tax | - | (1) | -100% | |||
Funds flow from operations | 775 | 4,981 | -84% | |||
Funds flow from operations / barrel (CDN$/bbl) (Note 4) | ||||||
Crude oil sales | $ | 60.23 | $ | 105.28 | -43% | |
Government royalty | (2.87) | (5.13) | -44% | |||
Transportation expense | (1.63) | (1.62) | 1% | |||
Operating expense | (16.86) | (16.19) | 4% | |||
Field netback | 38.87 | 82.34 | -53% | |||
General and administrative expense (Note 8) | (11.14) | (4.66) | 139% | |||
Interest Income | 0.07 | 0.03) | 137% | |||
Realized foreign exchange loss | (0.28) | - | 100% | |||
Current income tax | - | (0.02) | -100% | |||
Thailand - Funds flow from operations | $ | 27.51 | $ | 77.69 | -65% | |
Government royalty as percentage of crude oil sales | 5% | 5% | 0% | |||
Income tax & SRB as percentage of crude oil sales | 0% | 0% | 0% | |||
As percentage of crude oil sales | ||||||
Expenses - transportation, operating, G&A and other | 49% | 21% | 134% | |||
Government royalty, SRB and income tax | 5% | 5% | 0% | |||
Funds flow from operations, before interest income | 46% | 74% | -38% | |||
Wells drilled (wells were drilled after February 1, 2015) | ||||||
Gross | 3 | 1 | 200% | |||
Net | 1.5 | 1.0 | 50% | |||
Financial Statement Presentation - Excluding 50% Interest in Thailand Joint Venture from February 2, 2015 onwards (Note 1) | ||||||
Crude oil sales | 809 | 6,750 | -88% | |||
Government royalty | (38) | (329) | -88% | |||
Transportation expense | (24) | (104) | -77% | |||
Operating expense | (257) | (1,038) | -75% | |||
Field netback | 490 | 5,279 | -91% | |||
General and administrative expense (Note 8) | (185) | (299) | -38% | |||
Interest income | 1 | 2 | -50% | |||
Realized foreign exchange loss | (8) | - | 100% | |||
Current income tax | - | (1) | -100% | |||
Funds flow from consolidated operations | 298 | 4,981 | -94% | |||
Included in Investment in Thailand Joint Venture | ||||||
Net loss from Thailand Joint Venture | (293) | - | 100% | |||
Add back non-cash items in net loss | 770 | - | 100% | |||
Included in Investment in Thailand Joint Venture | 477 | - | 100% | |||
(thousands of Canadian dollars except where indicated) | Three Months Ended March 31, |
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2015 | 2014 | Change | ||
Canada Operations (Note 6) | ||||
Interest income | 47 | 88 | -47% | |
General and administrative expenses (Note 8) | (574) | (547) | 5% | |
Realized foreign exchange gain | 510 | 559 | -9% | |
Canada - Funds flow from (used in) operations | (17) | 100 | -117% | |
Indonesia Operations | ||||
General and administrative expense (Note 8) | (457) | (297) | 54% | |
Exploration expense (Note 9) | (161) | (309) | -48% | |
Realized foreign exchange gain (loss) | 220 | (108) | -304% | |
Indonesia - Funds flow used in operations | (398) | (714) | -44% | |
(1) | On February 2, 2015 the Company sold a 49.99% equity interest in its subsidiary Pan Orient Energy (Siam) Ltd. and retained a 50.01% equity interest in that company. The transaction resulted in Pan Orient Energy (Siam) Ltd. changing from a wholly-owned and controlled subsidiary to a joint arrangement where the Company shares joint control with the purchaser of the 49.99% equity interest. The resulting joint arrangement is classified as a Joint Venture under IFRS 11 and is required to be accounted for using the equity method of accounting rather than consolidated as it had previously been when Pan Orient Energy (Siam) Ltd. was a controlled subsidiary. The change in accounting from consolidation to the equity method has resulted in the accounts of Pan Orient Energy (Siam) Ltd. being derecognized from the consolidated financial statements and a net investment related to the portion of the interest retained being recognized at its estimated fair value upon initial recognition. Pan Orient's 50.01% equity interest in the assets, liabilities, working capital, operations and capital expenditures of Pan Orient Energy (Siam) Ltd. from February 2, 2015 forward are recorded in Investment in Thailand Joint Venture. |
(2) | As set out in the Consolidated Statements of Cash Flows in the unaudited Consolidated Financial Statements of Pan Orient Energy Corp. |
(3) | For the purpose of providing more meaningful economic results from operations for Thailand, and for comparison to previous period, the amounts presented consist of: Company's share of Thailand funds flow from operations at 100% from January 1, 2015 to February 1, 2015 (being the beginning of the year to the last date before the equity sale transaction was completed as discussed in note 1) Company's share of Thailand funds flow from operations at 50.01% from February 2, 2015 to March 31, 2015 (the period from when the Company completed the equity sale transaction to March 31, 2015). |
(4) | Funds flow from operations is cash flow from operating activities prior to changes in non-cash working capital, reclamation costs and excluding the recovery of prior year income taxes plus the corresponding amount from the Thailand operations which is recorded in Investment in Joint Venture for financial statement purposes. This measure is used by management to analyze operating performance and leverage. Funds flow as presented does not have any standardized meaning prescribed by IFRS and therefore it may not be comparable with the calculation of similar measures of other entities. Funds flow is not intended to represent operating cash flow or operating profits for the period nor should it be viewed as an alternative to cash flow from operating activities, net earnings or other measures of financial performance calculated in accordance with IFRS. |
(5) | The Sawn Lake Demonstration Project in Alberta has not yet proven that it is commercially viable and all related costs and revenues are being capitalized as exploration and evaluation assets until commercial viability is achieved. |
(6) | Cost of capital expenditures, excluding decommissioning provision and the impact of changes in foreign exchange rates. |
(7) | Joint venture partners in Andora's Sawn Lake SAGD demonstration project repurchased the 3% gross overriding royalty on a portion of the non-owned working interests in 36.5 sections for $2.7 million. |
(8) | General & administrative expenses, excluding non-cash accretion on decommissioning provision and stock-based payments. |
(9) | Exploration expense relates to exploration costs associated with the Citarum and South CPP PSCs in Indonesia. |
(10) | Tables may not add due to rounding. |
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